How Occupation Affects Auto Insurance Rates
How Occupation and Education Impact Car Insurance
Insurance is based on the idea of calculated risk, and car insurance companies consider every relevant aspect of your life when they determine your rates. They often go far beyond your driving history, age, gender, and driving habits, and may ask about such seemingly small details as your level of education and your occupation.
When you're comparing car insurance companies, you'll likely find that different companies may factor your occupation and/or education level into your rates.
Occupation and Car Insurance Premiums
Your occupation can affect your auto insurance rates. Certain careers are statistically associated with higher accident risk, while others are associated with lower risk.
Drivers in the following jobs are often subject to higher rates:
- Real estate brokers.
- Business owners and executives.
Because these jobs often involve high stress levels, overtime, and lack of sleep, accident levels can be much higher than the average among drivers who hold these occupations.
Also, many of these jobs require the driver to travel to and from client meetings and other appointments throughout the day.
Jobs that tend to show statistically low risk of accidents among drivers in those professions include:
- Nurses and first responders.
Because these professions are considered stable and require a very detail-oriented personality type, they are associated with lower accident rates.
Teachers, for example, have been shown to have better driving records than individuals in other professions, and some auto insurance companies sell car insurance only to teachers because of the cost-effectiveness of insuring low-risk drivers.
Of course, not every driver who is in a “high-risk" occupation is a high-risk driver, and not every driver in a “low-risk" occupation has a spotless driving record. The key here, as with all of the other factors that insurance companies consider when determining car insurance rates, is the average risk.
It is worth your while to comparison-shop for the best policy.
There are other factors that determine car insurance rates. For example, doctors may be more likely to get into accidents, but their ability to pay for damages without filing a claim may mean they won't face higher rates. This depends, however, on the their insurance companies.
Also, someone in a high-risk profession who uses public transportation to commute may have lower auto insurance rates than another driver in the same profession who commutes in his own vehicle.
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Education and Car Insurance Premiums
Having a higher level of education often comes with the benefit of lower car insurance rates. Again, this is based on the statistical averages.
Someone with a 4-year degree or a graduate degree is statistically less likely to be in an accident.
If you and your spouse are applying for a single car insurance policy, you might be able to save money by listing the one who has a higher level of education as the primary policyholder.
Fair or Discriminatory?
When you realize that your occupation and level of education may factor into your car insurance rates, you may find yourself wondering whether this is actually a fair practice.
Should a company be allowed to charge different rates to individuals based solely on occupation and schooling?
This has been a standard practice for years, and the car insurance companies argue that it is all based on numbers: certain occupations statistically present higher risk to car insurance companies than others, while higher levels of education statistically present lower risk.
However, some argue that taking occupation and education into consideration is discriminatory. California even bans the use of occupation and educational level to determine car insurance rates.
Check with your car insurance company to see if they use your profession or educational level to calculate your premium. Also, compare rates online to find the cheapest car insurance that suits your needs.